--- title: "What's Next for Airline Stocks Now That Delta Air Lines and United Airlines Have Reported?" type: "News" locale: "en" url: "https://longbridge.com/en/news/293471279.md" description: "Delta Air Lines and United Airlines reported Q2 results amid rising jet fuel costs. Despite higher expenses, Delta maintained its forecast while United raised its earnings outlook. Both stocks appear undervalued based on 2026 P/E ratios, with management citing pricing power and premium offerings to offset costs. The article argues that if investors view the airlines as diversified beyond cyclical ticketing, current valuations present a strong buying opportunity." datetime: "2026-07-22T12:10:51.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293471279.md) - [en](https://longbridge.com/en/news/293471279.md) - [zh-HK](https://longbridge.com/zh-HK/news/293471279.md) --- # What's Next for Airline Stocks Now That Delta Air Lines and United Airlines Have Reported? Investors were bracing themselves for what airlines like **Delta Air Lines** (DAL +0.11%) and **United Airlines** (UAL +0.15%) might report for the second quarter in light of the surge in jet fuel prices. However, although rising fuel costs are definitely having an impact on both airlines, Delta affirmed its forecast, and United Airlines actually increased its earnings outlook. Does this make both airline stocks a buy? ## Rising jet fuel costs It's no secret that hostilities in the Middle East led to sharply higher crude oil prices throughout the second quarter. The shortage of crude oil and jet fuel flowing through the Strait of Hormuz not only increased crude oil prices but also sent jet fuel crack spreads soaring. The end result was a major increase in jet fuel costs for airlines in the quarter. ![Airline passenger looks out the window. ](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Nzk2NDYvd29tYW4tZmx5aW5nLWluLXBsYW5lLXRyYXZlbC10cmFuc3BvcnRhdGlvbi0xMjAweDgwMC01YjJkZjc5LmpwZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Image source: Getty Images. As you can see below, the overwhelming majority of the increase in operating expenses in the second quarter was due to higher fuel costs, and in both cases, year-over-year operating income deteriorated. **Year-over-Year Change**  Operating Revenue Change Fuel Cost Change Total Operating Expenses Change Operating Income Change United Airlines $2,436 million $2,335 million $2,665 million ($229 million) Delta Air Lines\* $2,159 million $1,913 million $2,659 million ($501 million) Data source: Company presentations. \*Adjusted figures ## Both stocks look like excellent values Rising fuel costs do matter, and both companies' management teams told the market they plan for significantly increased fuel costs in 2026. Expand ![Delta Air Lines Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0RBTC5wbmcmdz0xMjg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) ## NYSE: DAL Delta Air Lines Today's Change (0.11%) $0.09 Current Price $84.63 ### Key Data Points Market Cap $56BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $83.81 - $85.33 52wk Range $50.45 - $95.68 Volume 8.8K Avg Vol 7.7M Gross Margin 15.96% Dividend Yield 1.14% Delta Air Lines expects its fuel costs to increase by $4 billion in 2026 compared to 2025, and United Airlines expects its fuel costs to be $6 billion higher than its original estimate going into the year. Expand ![United Airlines Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1VBTC5wbmcmdz0xMjg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) ## NASDAQ: UAL United Airlines Today's Change (0.15%) $0.18 Current Price $117.70 ### Key Data Points Market Cap $38BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $117.27 - $119.64 52wk Range $82.42 - $138.77 Volume 4.8K Avg Vol 5.8M Gross Margin 26.87% However, before getting despondent over rising fuel costs eating into profitability, it's important to note a few things: - Both companies are demonstrating the ability to offset rising costs by raising prices, cutting unprofitable capacity where necessary, and leaning into their premium cabin offerings, including pricing and other services. - Although crude oil and jet fuel prices rose in the second quarter, it's far from clear that they will remain at the same elevated level. - Even though rising costs reduced earnings for both airlines, they remain highly profitable, and both companies provided outlooks that placed their stocks firmly in value territory. Fleshing out the last point, Delta Air Lines continues to expect full-year earnings per share (EPS) of $6.50 to $7.50, and United Airlines actually raised its full-year EPS estimate range to $9 to $11 from a previous range of $7 to $11. To put these figures into context, here's what these guidance ranges mean in terms of valuation based on their price-to-earning (P/E) ratios: Company 2026 Price to Earnings at Low End of EPS Range 2026 Price to Earnings at High End of EPS Range United Airlines 12.9 times 10.6 times Delta Air Lines 13 times 11.3 times Data source: Company presentations. The author's analysis is based on prices on July 17. In other words, you are going to have to believe that both companies will miss the low end of their projections for them not to look like a good value based on 2026 earnings estimates. Moreover, note that the forecasts already have significantly higher fuel costs baked in. ## Are they a buy? In the end, the debate over the stocks comes down to the core question of whether the airline industry is still the same old cyclical industry characterized by violent boom-and-bust periods. If you believe it is, then a low price-to-earnings (P/E) ratio won't appease you, because many fortunes have been lost buying cyclical stocks at low P/Es just as their earnings peaked and then collapsed. However, if you share my belief that Delta and United have diversified their revenue streams away from overreliance on main cabin ticketing and toward premium cabin ticketing, auxiliary services, co-branded credit card remuneration, and loyalty programs, then there's a strong case for buying their stocks. Not least because they are being stress-tested right now by rising fuel costs and appear to be handling a difficult scenario well enough to at least maintain their forecasts. ### Related Stocks - [DAL.US](https://longbridge.com/en/quote/DAL.US.md) - [UAL.US](https://longbridge.com/en/quote/UAL.US.md) ## Related News & Research - [United Airlines explored merger with Delta before talks ended: WSJ](https://longbridge.com/en/news/293852308.md) - [United Airlines backs more than $20 billion Washington Dulles expansion plan](https://longbridge.com/en/news/294251108.md) - [Delta joins opening of SAF blending facility serving Minneapolis-St. Paul hub, targets 30 million gallons annually](https://longbridge.com/en/news/293975959.md) - [Delta's profits vs. GE's premiums: Is the market mispricing these 2 stocks?](https://longbridge.com/en/news/294175244.md) - [United warns of $6 bln hit on fuel costs amid oil-price surge](https://longbridge.com/en/news/292847524.md)